S&P rates Packers loans B

Standard & Poor’s said it assigned a B corporate credit rating to Packers Holdings LLC, which does business as Packers Sanitation Services Inc.

The agency also said it assigned a B rating to the company’s new $50 million senior secured revolving credit facility and $355 million senior secured first-lien term loan. The recovery rating is 3, reflecting 50% to 70% expected default recovery.

The outlook is stable.

The ratings reflect the company’s weak credit-protection measures following the leveraged buyout by private equity sponsor Leonard Green & Partners, narrow focus in the outsourced sanitation services industry, customer concentration and adequate liquidity, S&P said.

The agency also said it expects credit metrics to modestly improve from positive operating performance, including the annualizing of new contract wins and synergies from recent acquisitions over the next year.

S&P also said it expects modest repayment of debt from consistent free cash generation.

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